Or Royalties Inc. · TSX:OR
Or Royalties — Q1 2020 Earnings Presentation
23 slides from Or Royalties's earnings presentation, May 13, 2020
Slide 1: Q1 2020 Results
OSISKO GOLD ROYALTIES Q1 2020 RESULTS MAY 13, 2020 WWW.OSISKOGR.COM | NYSE&TSX:OR
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS FORWARD-LOOKING STATEMENTS This presentation contains forward-looking information and forward-looking statements (together, “forward-looking statements“) within the meaning of applicable Canadian securities laws and the United States Private Securities Litigation Reform Ac
Slide 3: Highlights Q1 2020
HIGHLIGHTS Q1 2020 18,159 GEOs1 earned Cash operating margin3 of 91% from royalties and streams interests Revenues from royalties and streams of C$37.8 million Acquired for cancellation 429,722 common shares for $3.9 million (average acquisition cost Cash flow from operating activities of of C$9.15
Slide 4: COVID-19 Impact
COVID-19 IMPACT Fundraising campaign for BUSINESS CONTINUITY AND EMPLOYEE MOISSON MONTREAL, HEALTH AND SAFETY Canada’s largest food bank. The health and safety of our employees and partner’s The company will match its employees and communities is of paramount importance employees donations up to C$5
Slide 5: Active Despite the Crisis
ACTIVE DESPITE THE CRISIS Bolstering balance sheet in a context of volatility Non-brokered private and adding flexibility for placement of C$85.0 million, acquisitions of new announced on March 30, 2020 royalties and streams Improving one of our high- quality Canadian precious Improvement of the sil
Slide 6: Producing Royalties and Stream
PRODUCING ROYALTIES AND STREAM Q1 2020 GEOs BY ASSET Q1 2020 GEOs BY PRODUCT OTHER METALS DIAMONDS 578 GEOs 1,935 GEOs (3%) (11%) 6,696 SILVER 18,159 4,198 GEOs GEOs GOLD (23%) 11,448 GEOs (63%) 2,313 1,914 1,776 981 706 612 571 535 490 474 245 172 110 216 320 21 7 GOLD SILVER DIAMONDS OTHER (R) = R
Slide 7: Q1 2020 Financial Performance
Q1 2020 FINANCIAL PERFORMANCE REVENUES FROM ROYALTIES CASH FLOW FROM OPERATING AND STREAMS (C$ M)4 ACTIVITIES (C$ M) Before changes in non-cash working capital items $27.9 $24.8 $37.8 $33.5 $22.6 $23.8 Q1 2019 Q1 2020 Q1 2019 Q1 2020 7
Slide 8: Q1 2020 Revenue Breakdown
Q1 2020 REVENUE BREAKDOWN 3 MONTHS ENDED (C$ 000) Mar. 31, 2020 Mar. 31, 2019 ROYALTIES: Revenues $25,804 $23,445 Cost of Sales ($168) ($101) CASH MARGIN: $25,636 $23,344 STREAMS: Revenues $12,030 $10,055 Cost of Sales ($3,193) ($3,493) CASH MARGIN: $8,837 $6,562 OFFTAKES: Revenues $14,771 $67,226 C
Slide 9: Q1 2020 Financial Performance
Q1 2020 FINANCIAL PERFORMANCE EARNINGS ADJUSTED EARNINGS (LOSS) Earnings before (C$ M) (C$ M) impairment charges $2.1 $6.0 C$19.3 M Q1 2019 Q1 2020 IMPAIRMENT CHARGE $7.5 C$28.6 M IMPAIRMENT ($13.3) CHARGE $5.8 ($26.5) Reflecting impairment charge of $19.3 million, net of income taxes Q1 2019 Q1 202
Slide 10: Q1 2020 Results
Q1 2020 RESULTS 3 MONTHS ENDED (C$ 000) Mar. 31, 2020 Mar. 31, 2019 GOLD PRODUCTION (oz) 11,448 13,511 SILVER PRODUCTION (oz AuEq) 4,198 3,147 DIAMONDS PRODUCTION (oz AuEq) 1,935 2,653 OTHER METALS (oz AuEq) 578 442 REALIZED GOLD PRICE (C$ per oz) $2,125 $1,731 REVENUES $52,605 $100,726 GROSS PROFIT
Slide 11: Strong Financial Position
STRONG FINANCIAL POSITION CREDIT FACILITY (C$ M) BALANCE SHEET ITEMS Mar. 31, 2020 Cash (C$ M) $158.3 $92.2 Including $85 M equity financing with Investissement Québec as at $243.3 April 1, 2020 Debt (C$ M) $423.5 AVAILABLE CREDIT: Investments (C$ M)5 $255.5 $407.8 M6 Basic Shares Outstanding (M) 16
Slide 12: A Quality Portfolio
A QUALITY PORTFOLIO Over 135 royalties, streams and CASH precious metals offtakes OPERATING 91% 79% 76% 70% MARGINS8 64% 48% Diversified cash flow from 16 North 7 producing assets (primarily on OSISKO Franco Royal Gold Sandstorm Wheaton Nevada American Majors gold mines) 14% 91% cash operating margi
Slide 13: A Quality Investment
A QUALITY INVESTMENT TSX | NYSE: OR Highest dividend in royalty Dividend Yield sector 1.5% 1.4% 1.0% 0.9% 0.7% 0.0% Significantly undervalued with opportunity for re-rate OSISKO Wheaton Royal Gold Franco Nevada Sandstorm North 7 American Majors High trading liquidity (on average $18.5M per day) P/NA
Slide 14: Hybrid Business Model
HYBRID BUSINESS MODEL 75% 25% EARLY STAGE CARIBOO CORE ROYALTY BUSINESS Accelerator Business North Spirit Discovery Group Leverage technical Cariboo is a district team to select early camp with decades stage stories of exploration potential In Accelerator companies, combine Seeking external assets/t
Slide 15: Sustained GEO Growth
SUSTAINED GEO GROWTH GEO PRODUCTION ENTERING INTO THE NEXT PHASES OF GROWTH WITH AT 91% CASH CONTRIBUTION OF CANADA’S OPERATING NEXT MAJOR GOLD MINES MARGINS8 140,000 + 80,553 78,006 58,933 30,588 38,270 12,499 2014 2015 2016 2017 2018 2019 Paid-For Royalty / Streaming 7 ROYALTIES CREATED THE ACCELE
Slide 16: Canadian Malartic Underground
CANADIAN MALARTIC One of the largest new gold UNDERGROUND resources globally Limited drilling thus far and East Gouldie open in all directions9 Initial production potentially East Gouldie, 5% NSR starting in 20239 North Odyssey & East Malartic, 3% NSR South Odyssey, 5% NSR OVER 10 MILLION OUNCES DEL
Slide 17: Eagle, Éléonore, Mantos
EAGLE Canada’s newest gold mine Ramping up to 220,000 ounces of gold per year Large land package being 5% NSR actively explored Yukon, Canada | Victoria Gold Corp. ÉLÉONORE Operated by world’s leading gold company Newmont Corporation Among the largest mines in Québec Aggressive exploration campaign
Slide 18: Windfall, Hermosa, Horne 5
WINDFALL Unique combination of size and high grade Over 5 million ounce resource11 and growing, all above 1,200m 2.0-3.0% NSR Additional 250,000 metres of Québec, Canada | Osisko Mining Inc. drilling in 2020, 20+ drills on site HERMOSA World-class polymetallic deposit South32 is a major diversified
Slide 19: Rare Exposure to an Entire Mining Camp: Cariboo Gold
CARIBOO GOLD 4.4 M OZ Au UNDERGROUND RESOURCE14 AND GROWING Decades of exploration potential with current resource sitting on 4 km of a 83 km trend 100% owned by Osisko +185,000 ounces of gold per year RARE EXPOSURE Low capex and easily scalable production TO AN ENTIRE Seeking external financing to
Slide 20: High Exposure to Gold Price
HIGH EXPOSURE TO GOLD PRICE BASED ON 2019 REVENUES 7% 10% 10% 18% 12% 9% 12% 33% 12% 9% OSISKO 17% PROVIDES THE HIGHEST 81% EXPOSURE TO 78% 68% 63% GOLD 53% OSISKO Royal Gold Franco Nevada Wheaton Sandstorm Precious Metals Gold Silver Energy Copper PGM Other 20
Slide 21: Optionality Through Accelerator Model
OPTIONALITY THROUGH ACCELERATOR MODEL Leverage technical skillset to find attractive exploration assets early and provide capital / expertise Attract additional market capital to invest on royalty ground Osisko shareholders exposed to over 18 million GEOs in resources through accelerator companies15
Slide 22: Q1 2020 Summary
Q1 2020 SUMMARY C$23.8 M 91% CASH FLOW FROM 18,159 C$169.5 M C$158.3 M OPERATING ACTIVITIES ATTRIBUTABLE CASH MARGIN EARNED IN INVESTMENTS IN CASH IN Q1 2020 GEOs EARNED FOR ON GEOs RECEIVED AS AT MAR. 31, AS AT MAR. 31, Q1 2020 FOR Q1 2020 C$27.9 M 2020 2020 (exluding offtakes) BEFORE CHANGES IN NO
Slide 23: Endnotes
ENDNOTES 1. GEOs are calculated on a quarterly basis and include royalties, streams and offtakes. Silver earned from royalty and stream agreements was converted to gold equivalent ounces by multiplying the silver ounces by the average silver price for the period and dividing by the average gold pric